(Updates with comment from Juncker in second paragraph, analyst in fifth; adds background starting in sixth.)
Oct. 4 (Bloomberg) -- German Deputy Finance Minister Joerg Asmussen was appointed by euro-area finance ministers to replace Juergen Stark on the European Central Bank’s Executive Board.
“We decided to replace Juergen Stark with Joerg Asmussen as a member of the Executive Board,” Jean-Claude Juncker, who leads the group of euro-area finance ministers, said today after a meeting of the group in Luxembourg. “We did that in a unanimous way.”
Asmussen will take up the ECB post after Stark’s resignation last month and former Bundesbank president Axel Weber’s in February laid bare German opposition to the ECB’s program of buying the bonds of debt-strapped euro-area nations such as Greece and Italy. Current Bundesbank President Jens Weidmann also opposed restarting of the bond purchases in August as the debt crisis threatened to engulf Italy.
The trained economist has been a key negotiator at the heart of German Chancellor Angela Merkel’s economic policy since she came to power in 2006. He and Weidmann both studied under Weber, who was a university professor before joining the central bank.
“Asmussen may be more constructive than Stark,” said Silvio Peruzzo, an economist at Royal Bank of Scotland Plc in London. At the same time, “I don’t expect him to reject the Bundesbank orthodoxy and the aversion to bond buying that characterize that institution,” he said.
Stark has said he will wait until his replacement takes office before he speaks publicly about his reasons for resigning from the ECB. In a Bloomberg News interview on Aug. 18, Stark said: “It’s generally known that I’m not a glowing advocate of these purchases.”
The Frankfurt-based ECB said yesterday it settled 3.8 billion euros ($5.1 billion) of bond purchases in the week through Sept. 30, down from 3.95 billion euros in the previous week. The ECB, which began the program in May 2010, has a total of 160.5 billion euros of government bonds on its books. Critics of the program say it risks fuelling inflation and acts as indirect monetary financing of governments.
--Editor: Patrick G. Henry
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